New York Attorney General Letitia James filed suit against Coinbase Financial Markets and Gemini Titan on Tuesday, alleging their prediction markets operate as illegal gambling platforms in violation of state law.
James claims both crypto exchanges are running unlicensed gambling operations without proper state authorization. The lawsuit also targets prediction markets that allow betting on outcomes involving New York college sports teams, which state law explicitly prohibits.
"Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution," James said in a statement.
The action marks New York's escalating regulatory crackdown on prediction markets. These platforms, which allow users to bet on event outcomes ranging from political elections to sports results, have gained prominence in the crypto sector but face mounting legal scrutiny.
Coinbase and Gemini have positioned their prediction market products as forecasting tools rather than gambling platforms. The distinction has become a focal point for regulators questioning whether crypto-based prediction markets circumvent traditional gambling restrictions.
The lawsuits reflect broader tension between crypto innovation and state gambling regulations as prediction markets expand their user bases.
The SEC has postponed a plan that would have granted broad exemptions allowing US crypto firms to trade tokenized versions of stocks. The delay affects a significant expansion of crypto assets linked to traditional equities.
Kelp DAO has completed recovery of its restaked Ether token following a five-week effort to address a $293 million exploit attributed to North Korea's Lazarus Group in April.
Morgan Stanley launched a cryptocurrency trading pilot on E*Trade with lower fees than Coinbase, Robinhood, and Charles Schwab. The firm plans a broader rollout in 2026.
Crypto exchange Bullish agreed to acquire UK-based financial services outsourcing firm Equiniti from Siris Capital for $4.2 billion. The deal is expected to close in January 2027.